Federal Tax Credits for Solar Domestic Hot
Available for systems placed into service between January 1, 2006
and December 31, 2008
US Department of Energy, The Energy Policy Act of 2005
The Energy Policy Act of 2005 (EPACT), signed by President Bush
on August 8, 2005, offers consumers and businesses federal tax credits
beginning in January 2006 for purchasing fuel-efficient hybrid-electric
vehicles and energy-efficient appliances and products. Most of these
tax credits remain in effect through 2008.
Consumers who purchase and install specific products, such as energy-efficient
windows, insulation, doors, roofs, and heating and cooling equipment
in the home can receive a tax credit of up to $500 beginning in
The EPACT also provides a credit equal to 30% of qualifying expenditures
for purchase for qualified photovoltaic property and for solar water
heating property used exclusively for purposes other than heating
swimming pools and hot tubs. The credit shall not exceed $2000.
Improvements must be installed in or on the taxpayer's principal
residence in the United States. Home improvement tax credits apply
for improvements made between January 1, 2006 and December 31, 2008.